EVERY great fortune starts with a small step, writes Karina Barrymore.

"If you can count your money, you don't have a billion dollars,'' the late billionaire J Paul Getty always said.

However, every big pile of money has to start somewhere, and taking care of the small change can quickly lead to a healthy stash of cash. The key to making small amounts grow is to save regularly and take advantage of interest.

The magic of compound interest can be a great helper when it comes to growing your money tree, but with current low interest rates, regular saving will be your best garden helper in today's environment.

"Small savings can really grow in to a big money tree. It can be as little as depositing $5 or $10 a week in to an online savings account,'' comparison company Finder.com.au spokeswoman Michelle Hutchison says.

However, the highest interest is usually only earned on larger amounts, which makes the regularity, not necessarily the amount, the best strategy.

"Regular savings is key because, not only do the high-interest savings accounts usually come with conditions for saving regularly, but interest is often calculated and compounded daily,'' Hutchison says. "Compounding interest is an added bonus because you essentially earn interest on your total balance, including the interest already accumulated."

CALCULATING INTEREST

Just how much interest you earn is another issue, as not all accounts calculate the interest the same way.

While some accounts add the interest daily, others do it at different time periods and often use the lowest balance as the amount to pay interest on.

Hutchison says that higher interest rates can also be earned by having another account with the same organisation.

"The highest returns on savings come with bonus interest when linked to a transaction account, which has your regular income deposited in to it. Otherwise, you must deposit a set amount each month, such as $200, and make no withdrawals,'' she says.

For example, one of the highest interest rates currently of 4.67 per cent is conditional on having a transaction account with a minimum deposit amount of $2000 a month, such as from salaries, Hutchison says.

Typically saving $50 a week, or $200 a month, can earn you a higher interest rate, while amounts less than this usually earn less interest.

SET GOALS

Financial literacy specialist and Commonwealth Bank spokesman Travis Hobbs often works with teenagers and first-time savers and says setting a goal is the best way to "switching on" the savings light bulb.

"The first step is to know what you want, set a goal, but you need to be really specific,'' Hobbs says.

"If it's a car, for example; what type of car, what model, what year? If it's a trip; where to, who are you going with, where will you stay? Or maybe it's an iPad, what model, what colour?

"The more specific and clear the goal, the more motivation,'' Hobbs says.

The second step is to devise a plan.

"This is the research step, how much do you currently earn, how much do you spend, what do you spend it on? What is the gap between how much you earn and how much you spend - because that's what you'll have to save," Hobbs says.

"If there's no gap, there's no saving and you're not going to get your goal.

"The only way to have extra money is either earn more or spend less."

The third step is putting the plan in to force.

"People say to me, 'I'll never get there, I can't afford $50 a week' but I always say, yes, you will, it will just take longer," Hobbs says.

"Ten dollars a week, $5 a week, sure it's not a huge amount but it will add up.

"Then, once you know what your goal is and how you're going to get there, tell as many people as possible.

"Not only does this make you accountable to stick with your plan but it also lets other people know what you're doing and why. By telling people you build a support network so that others can understand or help.''

START SMALL

MyBudget founder and chief executive Tammy May says to start small and gradually work your way up.

"Set up an automatic transfer from your account for a Christmas and birthday fund or put all your loose change in to a piggy bank each day," she says.

"These are small amounts that you won't notice missing but that will soon add up."

Hutchison also says saving money before you can get your hands on it can help stick to your plan. Direct transfer from your salary or wages in to a savings account means you don't get the chance to spend it.

For homeowners, it's also possible to reduce the amount of interest you pay and save at the same time.

"A mortgage offset account can be the best way to save, depending on the account conditions and if it has fees," Hutchison says. "If you can get your hands on a 100 per cent offset account, with no fees, you can save a fortune on interest charges, pay down your debt sooner and save."

A NOTE ABOUT RELEVANT ADVERTISING: We collect information about the content (including ads) you use across this site and use it to make both advertising and content more relevant to you on our network and other sites.